A report by Ernst & Young has seen the UK drop out the top five most attractive countries for clean energy investment, following fears of increased use of gas-fired power stations.
The UK dropped to sixth out of 40 countries in Ernst & Young’s quarterly report, published yesterday, falling back below Italy after a strong performance in offshore wind energy had raised its position earlier in the year.
The new emissions performance standard for power plants unveiled in last week’s draft Energy Bill sparked fears of a new dash for gas if it is used as a bridge fuel while coal-fired stations are phased out.
The cuts to solar Feed-in Tariff subsidies coming into force in August also had a negative impact, although this was exacerbated by a reweighting of the indices towards solar, which affects the UK disproportionately given its primary strength is in wind power.
However, despite the downgrade, Ernst & Young energy and environmental finance leader Ben Warren said plans for a significant spending programme to improve the country’s transmission infrastructure for renewable energy sources struck a more positive note – although details still had to be worked out.
“There is significant concern across the green energy sector that the government will shift its focus towards natural gas as an alternative to renewables,” he said.
“The Electricity Market Reform needs to deliver the right framework to stimulate investment across all forms of energy generation, including renewables.”